Iceland: Hitaveita Sudurnesja divided

Alexander Richter 3 Dec 2008

On December 1, 2008, the shareholders of Hitaveita Sudurnesja (HS) – Iceland’s only privatized utility – decided to divide the company in two parts.

This was based on national legislation in Iceland that demands the separation of production and distribution in the energy sector. The two major shareholders of HS are the municipality of Reykjanes and Geysir Green Energy, which hold together around 67% of the shares in the company.

Therefore the company was divided into HS Orka hf (or HS Power), that will be in the business of production and the sale of electricity, and HS Veitur (Distribution), which will be in the business of transmission and distribution. The resource rights for the geothermal reservoirs serving the business of both companies will be sold to the municipalities, which will then re-lease it to HS Orku hf for 65 years.

Ásgeir Margeirsson, CEO of Geysir Green Energy, will be chairman for HS Orka hf and Árni Sigfússon, the mayor of the municipality Reykjanes, will be chairman for HS Veitur hf. Source: visir.is